MAX Resource Corp (V.MXR) announced October 2 assays from seven drillholes at its Majuba Hill project in Nevada. MAX may earn 60% Majuba Hill from Claremont LLC by spending US$6.5 million on exploration. The results were:

MAX may increase its interest to 75% by spending a further $3.5 million on exploration. The property is subject to a 3% net smelter royalty, half of which may be purchased for $1.5 million.
Max President Stuart Rogers spoke to Kevin Michael Grace October 2.

RW: What is most significant about these results?

SR: These were results from a new zone on the property that we discovered last year, separate and apart from the main mine site, the old Majuba Hill Mine, which was a very high-grade copper and tin mine that was done manually during World War I and World War II. The drill results were from the DeSoto Zone, 1.4 kilometres to the northwest. It was identified through soil sampling that showed us a large anomaly about a half-kilometre by two kilometres with soil samples up to 109 g/t silver, a couple of percent copper. So we had a drillhole there that’s referenced in this news release: 29 metres with 30 g/t silver and 0.69% copper.

That equates to 98.3 g/t silver equivalent, based on $3 copper and $24 silver. So today’s assays were a stepout drilling of that discovery hole. We had to get a sense for where the mineralization was going. Four holes out of the seven hit. The intervals were good; we just didn’t quite get the length that we had with the 29-metre interval. We have our mineralized zone, but we still need to do more work to get an understanding of the geology. We’re going to focus back on Majuba Hill because we have a sizable target at the ridge itself.

RW: How big is your property?

SR: 3,500 acres, roughly.

RW: How much has been explored?

SR: Just the main patented claim area. There has been some old mine workings throughout the property but we’re really the first to do extensive geology, including soil sampling. I would say we’ve explored less than 5%

RW: How much drilling in total have you done at Majuba?

SR: About 3,000 metres.

RW: What are your drilling plans for the future?

SR: We’re working up a drill program of about 20 holes to define the extent of the mineralization at Majuba Ridge. It will probably be next year. And with the 20 holes, we’ll see if we can define a good starter resource on this property.

RW: How many metres will you drill?

SR: We’re going to do at least 5,000, and so you’re looking at 250-metre average hole.

RW: How far are you from an initial resource estimate?

SR: After the next 20 holes, we’d have enough for an additional resource estimate.

About 10 holes could get us 50 million tonnes. The whole idea of the 20 holes and the reason we use that number is we look at the size of the area, which is 500 metres long and 350 metres deep. When you come up with a resource estimate, you want to have something that’s meaningful, and at least 50 million tonnes would get us some attention. We think we can do better than that, if we do a 20-hole program.

RW: How much cash do you have? What’s your burn rate?

SR: Our cash is about $850,000, and our burn rate is around $40,000 a month, other than when we’re doing exploration.

RW: The cash you have will last for how long?

SR: We can get a year out of that at least. We own two other prospective properties 100% in Nevada. We have work commitments on Majuba to earn our interest, but our next threshold is March 2014.

RW: How many ounces would Majuba Hill have to have to be an economic project?

SR: We figure 100 million tonnes, if you’re looking at one-third of an ounce and do the rough math that’s 30 million ounces of silver. I think that’s where it can get some attention, and we think there’s potential to go way beyond that with unexplored areas. If you’re dealing with sulphides, it would be more expensive. In our case, this is all oxides—everything we’ve got to this point. There are sulphides underneath, which is common.

What’s made Nevada economic is that with oxide you take it off, you grind it and then leach it. So it’s very inexpensive to extract the ore. When you get to the sulphides, you have to put in a mill, a flotation system and you have higher capital costs.

RW: What is it that most excites you about Majuba Hill?

SR: I really like the fact that it’s in Nevada. It’s a mining-friendly jurisdiction. I like their access to infrastructure, and there are other mines in the area. I think given the fact that you have the infrastructure and everything in place, I think this has the size potential to be an economic mine.

At press time, MAX Resource had 24.5 million shares trading at $0.16 for a market cap of $3.9 million.

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